Which of the Following Observations Concerning GDP Calculations Is True

question 126

Multiple Choice

Which of the following observations concerning GDP calculations is true?

• A)Goods and services produced by governments are valued at market price.
• B)Inventories are treated as if they are yet to be sold.
• C)Goods produced but not sold during the year are counted in that year's GDP.
• D)Goods that firms add to their inventories do not count in the GDP.

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Definitions:

ATC

An abbreviation for Average Total Cost, a financial metric calculated by dividing the total cost by the quantity of output produced.

MC

Often referred to as Marginal Cost, it is the increase in total cost that arises from an extra unit of production.

Inputs

Resources used in the production process to produce goods or services.

Production

The process of creating goods or services using inputs such as labor, materials, and technology.